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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
-----------------------------------
(Mark One)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Quarterly Period Ended March 31, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from
to
Commission File Number 1-12116
CARR-GOTTSTEIN FOODS CO.
(Exact name of registrant as specified in its charter)
Delaware 920135158
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6411 A Street
Anchorage, Alaska 99518
(Address of principal executive offices)
Registrant's telephone number, including area code: (907) 561-1944
Indicate by check mark whether the registrant (1) has filed all documents
and reports required to be filed by Sections 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [ X ] No [ ]
The number of shares of the registrant's Common Stock outstanding at May
10, 1996 was 7,809,496 shares.
EXHIBIT INDEX
APPEARS AT PAGE 10
Page 1 of 16
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CARR GOTTSTEIN FOODS CO.
AND SUBSIDIARIES
FORM 10-Q
For the Quarterly Period Ended March 31, 1996
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
a) Consolidated Balance Sheets
as of March 31, 1996 (unaudited) and December 31, 1995 1
b) Consolidated Statements of Operations for the 13 weeks
ended March 31, 1996 (unaudited) and April 2, 1995
(unaudited) 2
c) Consolidated Statements of Cash Flows for the 13 weeks
ended March 31, 1996 (unaudited) and April 2, 1995
(unaudited) 3
d) Notes to Consolidated Financial Statements (unaudited) 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (unaudited) 11
PART II. OTHER INFORMATION 13
SIGNATURES 14
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CARR-GOTTSTEIN FOODS CO. AND SUBSIDIARIES
Consolidated Balance Sheets
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AMOUNTS IN THOUSANDS
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MARCH 31, DECEMBER 31,
1996 1995
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ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 4,343 $ 2,817
Accounts receivable, net 18,426 17,853
Income taxes receivable 674 164
Inventories 53,535 50,505
Deferred taxes 1,756 1,756
Prepaid expenses and other current assets 3,357 2,881
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Total current assets 82,091 75,976
Property, plant and equipment, at cost, net of
accumulated depreciation 150,947 152,836
Intangible assets, net of accumulated amortization 93,872 94,589
Other assets 12,358 13,219
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$339,268 $336,620
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 39,851 $ 35,986
Accrued expenses 15,640 7,352
Current maturities of long-term debt 3,359 3,551
Revolving line of credit 8,000 16,000
Estimated obligation for self-insurance 2,936 2,794
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Total current liabilities 69,786 65,683
Long-term debt, excluding current maturities 234,781 234,740
Estimated obligation for self-insurance 1,536 1,536
Deferred tax liability 488 488
Other liabilities 1,952 1,871
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Total liabilities 308,543 304,318
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Stockholders' equity:
Common stock, $.01 par value, authorized 25,000
shares, issued 9,736 shares 97 97
Additional paid in capital 52,607 52,595
Stock subscriptions receivable - (44)
Deficit (9,367) (7,734)
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43,337 44,914
Less treasury stock, 1,876 shares, at cost 12,612 12,612
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Total stockholders' equity 30,725 32,302
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Commitments and contingencies
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$ 339,268 $ 336,620
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SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
1
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CARR-GOTTSTEIN FOODS CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
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AMOUNTS IN THOUSANDS (EXCEPT PER SHARE DATA)
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MARCH 31, APRIL 2,
1996 1995
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(Unaudited)
SALES $ 142,808 $ 139,069
Cost of merchandise sold, including
warehousing and transportation expenses 102,705 95,497
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Gross profit 40,103 43,572
Operating and administrative expenses 35,435 37,598
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OPERATING INCOME 4,668 5,974
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Other income (expense):
Interest expense, net (6,957) (3,417)
Gain (loss) on disposals of property
and equipment - (23)
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Total other income (expense) (6,957) (3,440)
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Earnings before income tax expense (benefit) (2,289) 2,534
Income tax (expense) benefit 656 (1,330)
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Net earnings (loss) $ (1,633) $ 1,204
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Earnings (loss) per common share:
Net earnings (loss) per share $ (0.21) $ .08
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Weighted average common shares outstanding 7,805 15,700
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SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
2
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CARR-GOTTSTEIN FOODS CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
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AMOUNTS IN THOUSANDS
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MARCH 31, APRIL 2,
1996 1995
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(Unaudited) (Unaudited)
OPERATING ACTIVITIES:
Net income (loss) $ (1,633) $ 1,204
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation 3,630 3,290
Amortization of intangibles 717 885
Amortization of loan fees and discounts 365 132
Loss (gain) on disposal of property and
equipment - 23
(Increase) decrease in current assets:
Receivables (1,083) 197
Inventories (3,030) 886
Prepaid expenses (476) 1,137
Other assets 496 (2,800)
(Decrease) increase in current liabilities:
Accounts payable 3,866 (6,303)
Accrued expenses 8,287 (981)
Income taxes payable - 1,069
Other liabilities 223 (2,063)
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NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES 11,362 (3,324)
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INVESTING ACTIVITIES:
Additions to property and equipment (1,741) (5,593)
Proceeds from sale of property and equipment - 61
Proceeds from sale of subsidiary - 983
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NET CASH USED IN INVESTING ACTIVITIES (1,741) (4,549)
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FINANCING ACTIVITIES:
Net borrowings (payments) under revolving line
of credit (8,000) 8,000
Payments on long-term debt (151) (135)
Change in stock subscriptions receivable 44 (1)
Sale of treasury stock 11 -
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NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (8,095) 7,864
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,526 (9)
Cash and cash equivalents at beginning of period 2,817 321
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,343 $ 312
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 3,319 $ 3,983
Income taxes - -
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SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE>
CARR-GOTTSTEIN FOODS CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(1) During interim periods, Carr-Gottstein Foods Co. and subsidiaries (the
"Company") follows the accounting policies set forth in its audited financial
statements included in its Annual Report for the fiscal year ended December 31,
1995 filed with the Securities Exchange Commission. These consolidated interim
financial statements should be read in conjunction with such audited
consolidated financial statements and notes thereto. Management believes that
the accompanying interim financial statements reflect all adjustments which are
necessary for a fair statement of the results of the interim period presented.
All adjustments made in the accompanying interim financial statements are of a
normal recurring nature.
4
<PAGE>
CARR-GOTTSTEIN FOODS CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED
(2) CONDENSED CONSOLIDATING FINANCIAL INFORMATION
The Company issued $100,000 of senior subordinated unsecured notes on November
15, 1995. CGF Properties, Inc. has not guaranteed the unsecured notes and
financial information for this wholly-owned subsidiary is presented separately.
All of the Company's other direct and indirect subsidiaries, AOL Express, Inc.,
APR Forwarders, Inc., Oaken Keg Spirit Shops, Inc. and Alaska Advertisers, Inc.
are wholly-owned and have fully and unconditionally guaranteed the unsecured
notes on a joint and several basis and, accordingly, are presented on a combined
basis. Parent company only information is presented for Carr-Gottstein Foods
Co., which reflects only its business activity and its wholly-owned subsidiaries
accounted for using the equity method. Separate financial statements and other
disclosures for the guarantor subsidiaries are not presented because in the
opinion of management such information is not material.
The following are condensed consolidating balance sheets:
<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS
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BALANCE SHEET NON-GUARANTOR GUARANTOR PARENT
SUBSIDIARY SUBSIDIARIES COMPANY
MARCH 31, 1996 CGF PROPERTIES (COMBINED) ONLY ELIMINATION CONSOLIDATED
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
INVENTORIES $ - $ 5,201 $ 48,334 $ - $ 53,535
Other current assets 5,298 59,875 8,465 (45,046) 28,556
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TOTAL CURRENT ASSETS 5,298 65,076 56,799 (45,046) 82,091
Property, plant and equipment, net 67,493 6,070 77,384 - 150,947
Intangible, net - - 93,872 - 93,872
Investments in subsidiaries - - 96,853 (96,853) -
Other assets 65 483 11,810 - 12,358
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$ 72,856 $ 71,629 $ 336,718 $ (141,899) $ 339,268
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 3,464 $ 1,737 $ 109,631 $ (45,046) $ 69,786
Long-term debt, excluding current
maturities 42,395 - 192,386 - 234,781
Other liabilities - - 3,976 - 3,976
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TOTAL LIABILITIES 45,859 1,737 305,993 (45,046) 308,543
Common stock 10 44 97 (54) 97
Additional paid-in capital 28,966 39,381 52,607 (68,347) 52,607
Stock subscription receivable - - - - -
Retained earnings (deficit) (1,979) 30,467 (9,367) (28,452) (9,367)
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26,997 69,892 43,337 (96,853) 43,337
Less treasury stock - - 12,612 - 12,612
TOTAL STOCKHOLDERS' EQUITY 26,997 68,892 30,725 (96,853) 30,725
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$ 72,856 $ 71,629 $ 336,718 $ (141,899) $ 339,268
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</TABLE>
5
<PAGE>
CARR-GOTTSTEIN FOODS CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED
<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS
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BALANCE SHEET NON-GUARANTOR GUARANTOR PARENT
SUBSIDIARY SUBSIDIARIES COMPANY
DECEMBER 31, 1995 CGF PROPERTIES (COMBINED) ONLY ELIMINATION CONSOLIDATED
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<S> <C> <C> <C> <C> <C>
ASSETS
Inventories $ - $ 3,986 $ 46,519 $ - $ 50,505
Other current assets 5,397 57,859 7,261 (45,046) 25,471
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TOTAL CURRENT ASSETS 5,397 61,845 53,780 (45,046) 75,976
Property, plant and equipment, net 67,921 6,336 78,579 - 152,836
Intangible, net - - 94,589 - 94,589
Investments in subsidiaries - - 96,229 (96,229) -
Other assets 33 509 12,677 - 13,219
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$ 73,351 $ 68,690 $ 335,854 $ (141,275) $ 336,620
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 3,332 $ - $ 107,397 $ (45,046) $ 65,683
Long-term debt, excluding current
Maturities 42,480 - 192,260 - 234,740
Other liabilities - - 3,895 - 3,895
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TOTAL LIABILITIES 45,812 - 303,552 (45,046) 304,318
Common stock 10 44 97 (54) 97
Additional paid-in capital 28,966 39,381 52,595 (68,347) 52,595
Stock subscription receivable - - (44) - (44)
Retained earnings (deficit) (1,437) 29,265 (7,734) (27,828) (7,734)
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27,539 68,690 44,914 (96,229) 44,914
Less treasury stock - - 12,612 - 12,612
TOTAL STOCKHOLDERS' EQUITY 27,539 68,690 32,302 (96,229) 32,302
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$ 73,351 $ 68,690 $ 335,854 $ (141,275) $ 336,620
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</TABLE>
6
<PAGE>
CARR-GOTTSTEIN FOODS CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED
The following are condensed consolidating statements of operations:
<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS
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STATEMENT OF OPERATIONS NON-GUARANTOR GUARANTOR PARENT
SUBSIDIARY SUBSIDIARIES COMPANY
FIRST QUARTER 1996 CGF PROPERTIES (COMBINED) ONLY ELIMINATION CONSOLIDATED
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<S> <C> <C> <C> <C> <C>
SALES $ - $ 17,415 $ 133,443 $ (8,050) $ 142,808
Cost of merchandise sold, including
warehousing and transportation
expenses - 12,263 98,493 (8,050) 102,705
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GROSS PROFIT - 5,152 34,950 - 40,103
OPERATING AND ADMINISTRATIVE
expenses (215) 3,112 32,537 - 35,435
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OPERATING INCOME 215 2,040 2,413 - 4,668
INTEREST EXPENSE, NET (1,135) - (5,822) - (6,957)
GAIN (LOSS) ON DISPOSAL OF FIXED ASSETS - - - - -
Equity in subsidiary earnings - - 660 (660) -
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EARNINGS BEFORE INCOME TAX (920) 2,040 (2,749) (660) (2,289)
Income tax (expense) benefit 378 (838) 1,116 - 656
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NET EARNINGS $ (542) $ 1,202 $ (1,633) $ (660) $ (1,633)
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</TABLE>
7
<PAGE>
CARR-GOTTSTEIN FOODS CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED
The following are condensed consolidating statements of operations:
<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS
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STATEMENT OF OPERATIONS NON-GUARANTOR GUARANTOR PARENT
SUBSIDIARY SUBSIDIARIES COMPANY
FIRST QUARTER 1995 CGF PROPERTIES (COMBINED) ONLY ELIMINATION CONSOLIDATED
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sales $ - $ 16,028 $ 131,059 $ (8,028) $ 139,069
Cost of merchandise sold - 10,997 92,518 (8,028) 95,487
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GROSS PROFIT - 5,031 38,541 - 43,572
Operating and administrative
expenses (1,220) 2,530 36,288 - 37,598
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OPERATING INCOME 1,220 2,501 2,253 - 5,974
Interest expense, net (1,150) - (2,267) - (3,417)
Gain (loss) on disposal of fixed assets 2 - (25) - (23)
Equity in subsidiary earnings - - 1,515 (1,515) -
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EARNINGS BEFORE INCOME TAX 72 2,501 1,476 (1,515) 2,534
Income tax expense (30) (1,028) (272) - 1,330
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NET EARNINGS $ 42 $ 1,473 $ 1,204 $ (1,515) $ 1,204
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</TABLE>
8
<PAGE>
CARR-GOTTSTEIN FOODS CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED
The following is condensed consolidating cash flow information. The consolidated
Company's cash and cash equivalents is positive at each balance sheet date so
negative balances for individual subsidiaries are not classified as liabilities.
The net cash provided by operating activities fluctuates due to changes in
intercompany receivables and payables from the transfer of cash to and from the
parent company.
<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS
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STATEMENT OF CASH FLOWS NON-GUARANTOR GUARANTOR PARENT
SUBSIDIARY SUBSIDIARIES COMPANY
FIRST QUARTER 1996 CGF PROPERTIES (COMBINED) ONLY CONSOLIDATED
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<S> <C> <C> <C> <C>
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES $ 87 $ 26 $ 11,250 $ 11,363
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INVESTING ACTIVITIES
Addition to property and equipment - - (1,741) (1,741)
Addition to intangible assets - - - -
Proceeds from sale of subsidiary - - - -
Other - - - -
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NET CASH USED IN INVESTING ACTIVITIES - - (1,741) (1,741)
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FINANCING ACTIVITIES
Proceeds from issuance of debt - - - -
Net borrowings (payments) under line of credit - - (8,000) (8,000)
Payments on long-term debt (85) - (66) (151)
Purchase and retirement of common stock - - - -
Purchase of treasury stock - - 11 11
Change in Stock Subscription receivable - - 44 44
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NET CASH USED BY FINANCING ACTIVITIES (85) - (8,011) (8,096)
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2 26 1,498 1,526
Cash and cash equivalents at beginning of period 53 57 2,707 2,817
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 55 $ 83 $ 4,205 $ 4,343
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</TABLE>
9
<PAGE>
CARR-GOTTSTEIN FOODS CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED
The following is condensed consolidating cash flow information. The consolidated
Company's cash and cash equivalents is positive at each balance sheet date so
negative balances for individual subsidiaries are not classified as liabilities.
The net cash provided by operating activities fluctuates due to changes in
intercompany receivables and payables from the transfer of cash to and from the
parent company.
<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS
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STATEMENT OF CASH FLOWS NON-GUARANTOR GUARANTOR PARENT
SUBSIDIARY SUBSIDIARIES COMPANY
FIRST QUARTER 1995 CGF PROPERTIES (COMBINED) ONLY CONSOLIDATED
- - -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES $ 1,631 $ 1,040 $ (5,995) $ (3,324)
- - -----------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Addition to property and equipment - - (5,593) (5,593)
Addition to intangible assets - - - -
Proceeds from sale of subsidiary - - 983 983
Other 2 - 59 61
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NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 2 - (4,551) (4,549)
- - -----------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from issuance of debt - - - -
Net borrowings under line of credit - - 8,000 8,000
Payments on long-term debt (130) - (5) (135)
Purchase and retirement of common stock - - - -
Purchase of treasury stock - - - -
Other - - (1) (1)
- - -----------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES (130) - 7,994 7,864
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NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 1,503 1,040 (2,552) (9)
Cash and cash equivalents at beginning of period - 42 279 321
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,503 $ 1,082 $ (2,273) $ 312
- - -----------------------------------------------------------------------------------------------------------
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</TABLE>
10
<PAGE>
CARR-GOTTSTEIN FOODS CO. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. (UNAUDITED)
The following discussion should be read in conjunction with the financial
statements and related notes included elsewhere in this Form 10-Q.
GENERAL
Carr Gottstein Foods Co. Is the leading retail and wholesale food company
in Alaska operating full-service supermarkets and wine and liquor stores as well
as the only full-line food warehouse and distribution center (under the J.B.
Gottstein name) in the state.
RESULTS OF OPERATIONS
13 WEEKS ENDED MARCH 31, 1996 COMPARED TO 13 WEEKS ENDED APRIL 2, 1995
SALES. Sales for the 13 weeks ended March 31, 1996 were $142.8 million
compared to $139.1 million for the 13 weeks ended April 2, 1995. The 2.7%
increase was due in part to a new Carrs Store opened in Juneau, Alaska which was
cycled late in March coupled with sales improvement from the Eagle Quality
Centers (the "Eagle Stores") and increases attributable to Wholesale operations.
The increase in sales for the 13 weeks of 1996 reflects a 2.1% decrease and 1.3%
increase in comparable store sales for the Carrs Quality Centers (the "Carrs
Stores") and Eagle Stores, respectively. The Carrs locations were impacted by
several factors, including increased competitor promotional activity and
competitive openings which have not yet cycled.
GROSS PROFIT. Gross profit for the 13 weeks ended March 31, 1996 was $40.1
million compared to $43.6 million for the 13 weeks ended April 2, 1995. The
decrease in gross margin dollars is primarily attributable to the allocation of
warehousing and distribution expenses to cost of goods sold. In previous
quarters, these expenses were not charged to the cost of goods sold but were
classified as operating expenses. As a percentage of sales, gross profit was
28.1% for the 13 weeks 1996 compared to 31.3% for the 13 weeks 1995. Gross
profit as a percentage of sales for the 13 weeks 1996 decreased primarily as a
result of the allocation of warehousing and distribution expenses and partially
as the result of increased promotional expenses during the quarter.
OPERATING AND ADMINISTRATIVE EXPENSES. Operating and administrative
expenses for the 13 weeks ended March 31, 1996 were $35.4 million compared to
$37.6 million for the 13 weeks ended April 2, 1995. Operating and
administrative expenses as a percentage of sales were 24.8% for the 13 weeks
1996 compared to 27.0% for the 13 weeks 1995. The decrease in operating
expenses is primarily attributable to the allocation of warehousing and
transportation expenses to the cost of goods sold section, increases in expenses
due to a full quarter of expenses from the new Carrs Store opened in Juneau in
March 1995 and additional expenses related to the "Fusion" corporate re-
engineering project that was brought to a conclusion in March of 1996.
OPERATING INCOME. Operating income for the 13 weeks ended March 31, 1996
decreased to $4.7 million from $6.0 million for the 13 weeks ended April 2,
1995. This decrease was due in part to the full quarter of expenses from the
new Carrs Store opened in Juneau in March 1995, increases in depreciation, a
slight reduction in operating income due to the increase in promotional spending
and the impact of the additional expenses associated with the "Fusion" project
as discussed above.
OTHER INCOME AND EXPENSE. Net interest expense was $7.0 million for the 13
weeks ended March 31, 1996 compared to $3.4 million for the 13 weeks ended April
2, 1995. The increase in interest expense is primarily attributable to the full
quarter impact of the increased interest costs related to the borrowings
associated with the self stock tender completed by the Company in November of
1995.
11
<PAGE>
INCOME TAXES. The Company recognized an income tax benefit for the 13
weeks ended March 31, 1996 of $0.7 million compared to a $1.3 million expense (a
52.4% effective tax rate) for the 13 weeks ended April 2, 1995. The high
effective tax rate in 1995 resulted from the amortization of intangible assets
for which no tax benefit was available.
NET INCOME. Net loss for the 13 weeks ended March 31, 1996 was $1.6
million, or $0.21 per share, versus net income of $1.2 million, or $0.08 per
share for the 13 weeks ended April 2, 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity are cash flows from operations
and its working capital revolving credit facility, which are considered to be
adequate for anticipated cash needs. Primary uses are capital expenditures,
debt service, and lease payments.
Net cash provided by operating activities was $11.4 million for the 13
weeks ended March 31, 1996 compared to net cash used from operating activities
of $3.3 million for the same period in 1995. The change in the 13 weeks 1996
compared to 1995 was due primarily to increased inventories and receivables
offset by larger increases in accounts payable and accrued expenses.
Capital expenditures for the 13 weeks ending March 31, 1996 were $1.7
million. The majority of these expenditures were related to the "Fusion"
project and other projects started in the previous year. Although the company
will consider opportunities for new store construction or acquisition, should
they arise, capital expenditures are expected to be approximately $6.0 million
for fiscal 1996. It is anticipated that the balance of 1996 capital
expenditures will be funded out of cash provided by operations and borrowings
under the working capital revolver.
Net cash used for financing activities the 13 weeks ending March 31, 1996
was $8.1 million. During this time period, the Company reduced its borrowings
under its revolving line of credit by $8.0 million and made payments against its
long-term debt in the amount of $0.2 million. The level of borrowings under the
Company's revolving debt is dependent primarily upon cash flows from operations,
the timing of disbursements, long-term borrowing activity and capital
expenditures.
At March 31, 1996 there was $8.0 million outstanding on the revolving debt
borrowings and $0.3 million outstanding for standby letters of credit. The
Company had available unused credit of $27.0 million. Funds borrowed under the
revolving credit portion of the Company's credit facility are restricted to
working capital and general corporate purposes.
12
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None.
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None.
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits set forth in the Exhibit Index on page 14 hereof are
filed with this quarterly report on Form 10-Q.
(b) No reports were filed on Form 8-K during the quarter ended
March 31, 1996.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CARR-GOTTSTEIN FOODS CO.
By: s/s Mark R. Williams
-------------------------------------------------
Mark R. Williams
President and
Chief Executive Officer
Date: May 13, 1996
By: s/s Donald J. Anderson
-------------------------------------------------
Donald J. Anderson
Senior Vice-President and
Chief Financial Officer
Date: May 13, 1996
13
<PAGE>
CARR-GOTTSTEIN FOODS CO.
Exhibit Index
The following exhibits are attached as indicated:
Exhibit
Number Description of Exhibit
- - -----------------------------
27.1 Financial Data Schedule
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 4,343
<SECURITIES> 0
<RECEIVABLES> 18,781
<ALLOWANCES> (355)
<INVENTORY> 53,535
<CURRENT-ASSETS> 82,451
<PP&E> 213,371
<DEPRECIATION> (62,424)
<TOTAL-ASSETS> 339,628
<CURRENT-LIABILITIES> 69,786
<BONDS> 234,781
0
0
<COMMON> 97
<OTHER-SE> 43,239
<TOTAL-LIABILITY-AND-EQUITY> 339,628
<SALES> 142,808
<TOTAL-REVENUES> 142,808
<CGS> 102,705
<TOTAL-COSTS> 102,705
<OTHER-EXPENSES> 35,435
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,957
<INCOME-PRETAX> (2,289)
<INCOME-TAX> 656
<INCOME-CONTINUING> (1,633)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,633)
<EPS-PRIMARY> (.21)
<EPS-DILUTED> (.21)
</TABLE>
